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Interna The In Iranian Seyed Ba Seyed Baba Hooman Ab Ali Farman KEYWOR Iranian finan Firm growth Firm profita System-GM The high c environmen means that their custo which a fi indicative f Organizatio growth ar Although Correspondin * Email: b_ebrah Received 29 J December 2016 Internationa ational Jour nter – n Marke abak Ebra ak Ebrahimi, bdollahi, Depa ni, Departmen RDS ncial market, h, ability, MM 1. Intro competitiven nt, added to t industries m omers [1]. In irm achieves factor accord onal theorist re firms' pursuing ng author: Seyed himi@kntu.ac.ir June 2016; revis 6 al Journal of Ind nal of Indus Relation t ahimi * , Ho Department o artment of Ind t of MBA ,Iran A O e m p p c f d o a i o b m p ( © R oduction1 ness of today o effects of must find w n so doing, s profit and ding to tradit ts believe th two compe g both d Babak Ebrahim sed 3 December dustrial Enginee strial Engin Septemb htt nship B ooman Abd of Industrial E dustrial Engin n University o ABSTRACT Owing to th engaging fo market of t present st profitability consisting o firms. For during2005 order to und and profitab is employed obtained in between p manufactur positive im (profit) is st © 2016 IU Reserved y’s economic globalizatio ways to satis the extent growth is tional theorie hat profit a eting targe objectiv mi 2016; accepted ering & Producti eering & Pr ber 2016, Volu pp. 209 -2 tp://IJIEPR. etween dollahi, Al Engineering, K neering, Karaj of Science and T he attractive or investor these econo tudy exam y and gro of Tehran S r the purp 5-2014 perio derstand th bility, syste d to estimate ndicate that profitability ring firms. mpact of cu tronger than UST Publica cal on, sfy to an es. nd ets. ves 11 si ei in pr an co re 6, ha de fr in m re ion Research, Se roduction Re me 27, Numbe 217 .iust.ac.ir/ Profitab li Farman K. N. Toosi Un j Branch, Isla d Technology eness of dev rs, studying omies seem mines the owth in Ir Stock Mark pose of th od constitu e direction em GMM (G e growth an t there is a and grow Also, the e urrent prof n the impac ation, IJIEP imultaneousl ither profit o nteraction rofitability. nd profitab ontroversial esults reporte , 7, 8, 9, 10, ave provide eveloped cou rom a develo nvestigate manufacturing elationship eptember 2016, V esearch (201 er 3 bility a i niversity of Te amic Azad Uni veloping eco g cardinal s importan relationsh ranian ma ket listed be he study, uted the sam of causality Generalized nd profit re a positive wth in th empirical an fit (growth) ct of the prio PR. Vol. 2 y is difficu or growth, b occurs be The relatio ility has b issue in fina ed in empiri 11, 12, 13]. ed evidence untries, this oping's. In so the data g firms to between p Vol. 27, No. 3 16) nd Gro echnology iversity onomies, wh features of t and nece hip betwe anufacturing etween man firms' ann mple of the y between fi d Method of egressions. T bilateral re he case o nalysis find ) on curre or's year.. 27, No. 3, ult, manage but not both etween gro nship betwe been a str ance due to i cal findings While prev e from adv paper inves o doing, the of Irani fathom w profit and owth in hich seems f financial essary. The een firm's g industry nufacturing nual data e paper. In irm growth f Moments) The results elationship of Iranian ds that the ent growth All Rights ers opt for h. Thus, an owth and een growth riking and inconsistent [2, 3, 4, 5, ious studies vanced and stigates data researchers ian listed whether the growth is
Transcript
Page 1: The In ter – Relationship B etween Profitability and Gro ...ijiepr.iust.ac.ir/article-1-685-en.pdf · profit) is st 2016 IU eserved ’s economic globalizatio ays to satis the extent

Interna

The InIranian

Seyed Ba

Seyed BabaHooman AbAli Farman KEYWORIranian finan Firm growth Firm profitaSystem-GM

The high cenvironmenmeans thattheir custowhich a fiindicative fOrganizatiogrowth arAlthough

Correspondin*

Email: b_ebrahReceived 29 JDecember 2016

Internationa

ational Jour

nter – n Marke

abak Ebra

ak Ebrahimi, bdollahi, Depani, Departmen

RDS ncial market, h, ability,

MM

1. Introcompetitivennt, added tot industries m

omers [1]. Inirm achievesfactor accordonal theoristre firms'

pursuing

ng author: Seyed

[email protected] June 2016; revis6

al Journal of Ind

nal of Indus

Relationt

ahimi*, Ho

Department oartment of Indt of MBA ,Iran

A

Oemppcfdoaiobmp(

©R

oduction1 ness of todayo effects of must find wn so doing, s profit and ding to traditts believe thtwo compe

g both

d Babak Ebrahim

sed 3 December

dustrial Enginee

strial Engin

Septemb

htt

nship B

ooman Abd

of Industrial Edustrial Enginn University o

ABSTRACT

Owing to thengaging fomarket of tpresent stprofitabilityconsisting ofirms. Forduring2005order to undand profitabis employedobtained inbetween pmanufacturpositive im(profit) is st

© 2016 IUReserved

y’s economicglobalizatio

ways to satisthe extent growth is

tional theoriehat profit aeting targe

objectiv

mi

2016; accepted

ering & Producti

eering & Pr

ber 2016, Volupp. 209 -2

tp://IJIEPR.

etween

dollahi, Al

Engineering, Kneering, Karajof Science and

T

he attractivefor investorthese econotudy examy and groof Tehran Sr the purp5-2014 perioderstand thbility, syste

d to estimatendicate thatprofitability ring firms. Ampact of cutronger than

UST Publica

cal on, sfy to an es. nd

ets. ves

11

sieiinprancore6,hadefrinmre

ion Research, Se

roduction Re

me 27, Numbe217

.iust.ac.ir/

Profitab

li Farman

K. N. Toosi Unj Branch, Islad Technology

eness of devrs, studyingomies seemmines the owth in IrStock Markpose of thod constitue direction

em GMM (Ge growth ant there is a

and growAlso, the eurrent profn the impac

ation, IJIEP

imultaneouslither profit onteraction rofitability. nd profitabontroversial esults reporte, 7, 8, 9, 10, ave provideeveloped courom a develonvestigate

manufacturingelationship

eptember 2016, V

esearch (201

er 3

bility a

i

niversity of Teamic Azad Uni

veloping ecog cardinal s importan

relationshranian maket listed behe study,

uted the samof causality

Generalizednd profit rega positive wth in th

empirical anfit (growth)ct of the prio

PR. Vol. 2

y is difficuor growth, boccurs beThe relatioility has bissue in finaed in empiri11, 12, 13].

ed evidenceuntries, this oping's. In sothe data

g firms to between p

Vol. 27, No. 3

16)

nd Gro

echnology iversity

onomies, whfeatures oft and necehip betwe

anufacturingetween man

firms' annmple of they between fi

d Method ofegressions. Tbilateral re

he case onalysis find) on curreor's year..

27, No. 3,

ult, managebut not bothetween gronship betwebeen a strance due to ical findings While prev

e from advpaper inves

o doing, the of Irani

fathom wprofit and

owth in

hich seems f financial

essary. The een firm's g industry nufacturing nual data

e paper. In firm growth f Moments) The results elationship of Iranian ds that the ent growth

All Rights

ers opt for h. Thus, an owth and een growth riking and inconsistent [2, 3, 4, 5,

ious studies vanced and stigates data

researchers ian listed

whether the growth is

Page 2: The In ter – Relationship B etween Profitability and Gro ...ijiepr.iust.ac.ir/article-1-685-en.pdf · profit) is st 2016 IU eserved ’s economic globalizatio ays to satis the extent

210 S. B.

contingent Developingpositions sfinancial companies towards demore profitof the devgrowth leveto investorsThe proposother is sugstill seemswhose finaenough, boconsidered for expanscontrol thinvestment growth to profit or gthese veryFurthermorbenchmarkhas becomfor businesinterplay empirical aIn this contthe relationin other wanswers forcorollary oprofitabilityTherefore, Iranian list2005-2014annually fvariables, financial legrowth andGMM [16]the literatuinvestigateamongst Ivariables asThe paper pthe literatuthe regresspresented. empirical r

Theories, (FMAs) experience

. Ebrahimi*,

Internationa

upon g economiessince the comarkets ha

and inveseveloping ftability and

veloping marels that deves [14]. sition that groggested by sos equivocal. ancial markeoth profit aas two imp

sion as the he situationt decisions [1

be achievegrowth sincey two objere, developin

k of firms' se one of the

ss managers between p

analysis detertext, the resenship betwee

words, the aimr these very of growth? y and rethis paper

ted manufact. Profit and for this persuch as fireverage, ared profit regr]. This pape

ure because s the pr

Iranian firms well. proceeds as

ure germane sion model a

This is foresults. Sectio

2. Literatsuch as F[17], netw

effects [19

H. Abdollahi

al Journal of Ind

economic s are acquiomplexities oave caused stors havingfinancial magrowth. Therkets is in t

eloped marke

owth and proome related In developi

ets are not wand retainedportant sourc

firms mustn to make15]. In ordered, firms eite it is difficctives concng growth hsuccess, ande most comm[11]. Therefo

profit and rmines its dir

earchers try toen growth anm of this stuquestions: Is

Or firms einvesting uses a paneturing firms growth rates

riod, and serm's size, dee consideredressions by er provides cthis is the frofit-growth

ms while us

follows. Secto our study

and estimatioollowed in on 5 conclud

ture ReviewFirst Mover

work extern9], and sca

i, A.Farmani

dustrial Enginee

developmenring engagiof the prese

internationg a tendenarkets to eae attractivenethe profit a

ets do not off

ofit affect eatheories, buting economiwell-developd earnings aces of finant permanente appropriar for profitabther focus

cult to achiecurrently [12has been a kd sales growmon objectivfore, there is

growth threction. o shed light

nd profitabilitudy is to ses profitabilitygrow due the profit

el data on over the sp

s are observeveral contrebt ratio, a. We estimausing system

contribution first study th

relationshes controlli

ction 2 reviewy. In section on method asection 4 b

des the paper

w r Advantagnalities [18ale economi

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ach t it ies

ped are nce tly ate ble on

eve 2].

key wth ves an

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eek y a to

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pan ved rol nd ate m-to

hat hip ng

ws 3,

are by

r.

ges 8], ies

[2orviSecoadBgrrefirstthgrwthBimlapogrmthfirhoa reYbegrhatoge[2cosicoHreSogrGstgrLnotrdythOdeprge[2threco

r –Relationsh

ion Research, Se

20], suggest tr establishinia lowering ceveral, but onducted indvanced couennett [21] rowth and pelationships rms althoughtatistically sihe presence orowth rate an

with antecedehat profit-grritish firms.

mpact on coarger in Frenositive and rowth. Inve

manufacturinghat the correlrm growth iowever, Coapositive imp

elationship Yukhanaev [2etween pasrowth rate. ave demonsowards profieneration slo29]. Besides,ontended thaituation to omparison w

However, a elationship iome studiesrowth and

Gschwandtnertatistically sirowth and prikewise, Botot a remarkend and proynamic panehat growth an

On the othemonstrated rofitability eneration slo29]. A studyhat profit-foceach profitabomparison

hip Between P

eptember 2016, V

that profitabg a strongercosts.

not manyn empirical untries. For

observed aprofitability-in small andh only the grignificant. Cof a positivend profit groent studies Crowth relatio

Coad [7] reonsequent finnch firms, wh

statisticallyestigating ag firms, Bottlation betweeis positive, bad et al. [25] pact on profis not ap

26] reported t profitabiliOn the oth

strated that itability [27,ows down b, a study byat profit-focu

reach pwith growth-f

consistent is not founds report no

profitabilityr [30] argueignificant relrofitability inttazi et al. [2kable relatioofitability. Fel model, Shnd profitabiliher hand, that growth[27, 28, 3

ows down bby Davidss

cused firms able growth

with

Profitability an

Vol. 27, No. 3

bility arises fr market pos

y, studies realm specinstance, R

a positive p-number of d medium-sirowth case is

Cox et al. [22e relation beowth rate. In Cowling [23onship is deported that nancial perfhilst profitab

y significanta sample azzi et al. [2en profitabilibut scarcely showed that

fitability, bupproved. Pe

a positive ity and fir

her hand, sogrowth doe, 28] and f

because of swy Davidssonused firms aprofitable gfocused-firm

positive grd in empiric relation by [27]; foed that therlationship ben American 24] proved t

onship betweurthermore,

hehzad et al. ity are indepe

some stuh does not le32] and firecause of raon et al. [10

are in better cin the futugrowth-foc

nd Growth …

from growth sition either

have been cifically in

Robson and profitability-

employee's ized British s considered 2] indicated

etween sales conformity

3] indicates dynamic in the growth

formance is bility is of a t effect on

of Italian 4] observed ity ratio and significant;

t growth has ut reciprocal erényi and relationship rm current ome studies es not lead firm's profit wift growth

n et al. [10] are in better growth in s. rowth-profit cal studies. etween the r instance, re is not a etween firm companies.

that there is een growth by using a [31] found

endent. udies have ead towards rm's profit apid growth 0] suggested condition to ure that in cused-firms.

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The Inter –R

Markman arelationshipgrowth as negative iprofitabilityAlso, Jangthe dynamigrowth. Thinfluences positively. growth rateyear’s prorestaurant growth haDelmar et relationshipused dynamfixed effecrelationshipKorea, annegatively,Federico amanufactur2010, and growth is nthe profit-investmentprofits dispinvestment to higher generalizedKim [37] managemenInsert TablTable 1 prthe most sethe empiricfindings. Aempirical athe directifirms of difwith the objective in

3. ReseMany reseseries modmore efficipurpose ofrelationshiptwo-step sysection, resvariables ar3-1. ResearDynamic psuitable wh

Relationship B

Internationa

and Gartner p via sales indicators ofinterplay bey.

g and Park [ic relationshhey found ththe growth Although, th

es have a negfit, their finindustry, p

as a detrimal. [33] recops between gmic panel dacts and GMMp between gd found th, but growthand Capelleraring firms ddeclared th

not significa-growth relat. Firm's conplay positivet spike and ir growth. d method of found thnt strategy lie 1 resents the reminal empical results coAs seen aboapproaches aion of proffferent finanliterature, t

n Iranian man

earch Methearchers havedels together iency in finaf this study,p between gystem GMMsearch methore presented.rch Methodpanel data ehere unobse

Between Prof

al Journal of Ind

[27] studiedas well as

f firm growtetween firm

[12] provideip between phat the prior

rate of thehe current angative effect ndings evincprofit begetsmental impaognized positgrowth and pata regressionM methods tgrowth and phat profit ah affects proas [35] examduring the

hat the effecant. Yu et alationship is ntemporaneoue and signifinvestment aBased on moments M

hat a profiimits firm's g

results and dirical studiesonsist of a move, both thare paradoxifit-growth rncial marketsthis paper nufacturing

hodology ane compared in order to

ncial market, trying to growth and p

M [16] is empodology, mo.

dology estimation b

ervable facto

fitability and

dustrial Enginee

d profit-grows employmeth and found

m growth a

d evidence profit and firr year’s proe current yend prior yearon the curre

ce that in ts growth, bact on proftively bilater

profit. Lee [3ns by applyito evaluate tprofitability affects growofit positivelmined Spaniperiod 199

ct of profit l. [36] show

mediated vus and laggicant effect

activity leadithe syste

Model, Yoo aitability-drivgrowth.

denouement s, showing th

motely group heoretical aical in findirelationship s. To be in li

explores thfirms.

nd Modeldifferent timdetermine t

ts [38]. For tfigure out tprofitability,ployed. In thodel, data, a

becomes moors affect bo

Growth …

ering & Producti

wth ent d a nd

on rm

ofit ear r’s ent the but fit. ral

34] ng the in

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ore oth

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S. B. Ebrah

ion Research, Se

he dependentlso some eelated to thariable [39]. rowth on prond [16] su

model emplotudy; by the

GMM estimatGMM (sys-Gstimation of ifferences (wnd in levelsnstruments). onsistent apaking the res

when heterosxist [40]. Hstimations ofownward bia

A weakness many instrumiverse methoumber. Usinvailable lagshe first methompound insets. A dynamechniques toeasons to jus

GMM panelstimation igstimation biaynamics im

misspecified agged depend43]. Secondlariable withegression moynamic panehe static mod-2. Model o depict the rowth and quations are

,

1,2, … , .1,2, … , .,

; 11,2, … , .

himi*, H. Abd

eptember 2016, V

t and the expxplanatory

he past valuThis is the

rofit, and viuggested th

oyed in thee way, the tor was alsoGMM) deritwo simultan

with lagged s (with lagg

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However, thef the standarased. of GMM e

ment problemods to less

ng only certas for instrumhod. The sestruments bymic way is together [41stify the prefl model. gnores dynas [42, 43]. Tmplies thatas passing

dent variablely, the corrh the erroodel can be sel data modedels.

specificatioprofit m

specified:

,

,1,2, … , .

ollahi, A.Far

Vol. 27, No. 3

planatory vavariables arues of the matter in regice versa. B

he dynamic e equations

developed o recognized ived from neous equati

levels as iged first diftep sys-GMthe weight

m the one-stand serial

e two-step Grd errors that

stimations mms, althoughen instrumeain lags, rathments (limiteecond, collap adding themto benefit fro1]. There aference of dy

Firstly, stnamics and The meaningt such m

over the e on dependerelation of ior term ocsolved easierels in comp

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,

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Page 4: The In ter – Relationship B etween Profitability and Gro ...ijiepr.iust.ac.ir/article-1-685-en.pdf · profit) is st 2016 IU eserved ’s economic globalizatio ays to satis the extent

212 S. B.

,

1,2, … ,1,2, … ,,

; 1,2, … ,

Where i repindicates thand indare randomrelated confinancial coefficientsestimated exogenous 3-3. Data aThe data aannual finafirms listeperiod 200believed tois used as growth is awould desgiving a mengenderedtheir comptable 2. Insert TablDescriptivevariables athe results profit rateTehran Stohigh growtaverage sirelatively laInsert Tabl

Before mostep, we urepresentatbetween gror betweenrate. In taplots, are dInsert TablThe first rand prior yTable 2 repgrowth rateprofit rate i

. Ebrahimi*,

Internationa

,..

,1,2, … , .

.

presents the he time spandicate firm-spm error termntrol variableverage as of these in the reginstrumenta

and Variablare extractedancial statemd in Tehran

04-2010. In o be closely

a measure an obvious psignate a fimore accuratd by the firputational m

e 2 e statistics are presented

show that ge for manuock Market. Ith rate, but ize indicatearge. e 3

4. Empirodel estimatiuse scatter ption of the rowth rate an profit rateable 4, thesedisplayed. e 4 ow of Tableyear's profitpresents PRes. It is obvioin times t an

H. Abdollahi

al Journal of Ind

,

,

firms (i = 1n (t = 2004 ,pecific effecs. To constiles, size, de

are considercontrol varigressions, ol variables. les d from balanments of 72 n Stock Mathis paper,

related to thof firm grow

prospect for rm’s profitate image of rm. Model's methods are

of the maind in table 3growth rate ifacturing fiIt means thesprofit rate i

es that the

rical Resultion and as plots to pro

underlyingand prior yeae and prior e relationshi

e 4 displayst rate. The s

R(t), PR(t-1), anous, based on

nd t-1, the cu

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dustrial Enginee

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nce sheets amanufacturi

arket over tsales growt

he profitabilitwth. Net sala variable thability due the real salvariables apresented

n and contr. Accordinglis greater thrms listedse firms haveis slower. Tese firms a

ts a prelimina

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second row nd prior yean the plots, f

urrent and pri

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ion Research, Se

ear’s profit ther plots haelationship bulittle positiv

lots show elationship bbout directioo find the d

2), Eq (3), aGMM estimatables 5 and tansert Table 5

According to statistically

rowth and elationship end the growq (1) denourrent profitmpact of the1.2) is morerowth (0.5)ignificant. It o high level egression eariable is inontrol the enorrelation of erm. Using thnd regressinurrent profitositive effecrofit impact

meaning that s well as maf Katouzian rowth does hn the currenignificant (t-rms of Tehra

hat high profigher growthargan test utocorrelatioerformed tonstruments vf findings. he results of

4), are preseesult of Eq (3nd significanrofit. Besideurrent profitegressions enositive coeffrofit and gr

hip Between P

eptember 2016, V

rates have pave a cloud ut GR(t) and

ve correlationthat whetheetween varians of effects

directions of and (4) are etors, and the able 6. results prese

y significantprofit. L

exists betweth of prior y

otes that grot bolsters the current pr apparent th; however, means highof growth

quations, thncluded into ndogeneity prf independenthe lagged pr

ng Eq (2), t and prior t on firms' gis not sign

Iranian maraking an allu[44]. On thehave a fairlynt growth (-value, 16.39an Stock Marfits of a partih rates nex

and the n of the re

o assess movalidity, and

f the profit reented in Tab3), prior yearnt (t-value, 3s, the current positively ngender statificient estimrowth terms

Profitability an

Vol. 27, No. 3

positive corrshape and imGR(t-1) that a

n. Clearly, ther or not ables but no will be give

f causalities, estimated by

results are p

ented in Tablt relationshiLikewise, aeen the presyear. The reowth persis

he current grofit on currhan that of

both are h profitability

for firms. Ihe lagged the model

roblem or bet variable wirofit added toit is reveale

year's profgrowth, but nificant (t-varket is intensusion to pick other hand,

y strong posi(0.54) and 9) for the mrket. The resicular year t

xt year. Motest for se

esiduals, ARodel specifiapprove the

egression, Eqble 6. Accorr's profit is o3.53) impactnt growth inf

and signifiistically sign

mates of the . That is to

nd Growth …

relation. All mplicate no almost have hese scatter there is a information

en by them. Eq (1), Eq

y using sys-presented in

le 5, there is ip between a positive sent growth egression of sts and the growth. The rent growth prior year's statistically

y gives rise In dynamic

dependent in order to

etter still the ith the error o the model ed that the fits have a prior year's alue, 0.57), sely volatile kaxe society

prior year's itive impact statistically

manufactory sults convey end to have

oreover, the econd-order

R (2), were ication and e robustness

q (3) and Eq rding to the of a positive t on current fluences the icantly. All nificant and prior year's

o say, high

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The Inter –R

growth leaof Eq (4) cvery little aprofit, the obvious thaComparingthat of groStock Markof the currvice versaeffect. It mdevelopingfactors. Furlagged gropositively, furthermorerelationshipgrowth. Insert Tabl

This study firm's promanufacturStock Mcovering 2direction oand profitamethods agrowth regThe empirrelationshipcurrent propositive rewith currenrelationshipcurrent proregressionsprofit positprofit is creported bfinancial mIndustrial relationshipThe preserelationshipthat as it min the datasufficient ethe all Iranusing LADthe robustnthis study explore theon the relat

Relationship B

Internationa

ds to high pconveys thatand insignifiimpact of th

an the prior'sg the regressowth, for maket, the authrent profit o, is much s

may happen g economy arthermore, th

owth affects but it is no

e, there is ap between la

e 6

5. Coinvestigates

ofitability aring industrarket liste2005-2014. of the causalability, Dynaare employeressions. rical analysip between ofit; what is elationship bnt growth ratp between pofit exists. Ths show thattively. The pconsistent wby other remarket and c

Organizatiop. ent study fip between gr

may, limitatioaset used in enough to genian manufa

D regression ness of the reindicate a ne

e moderatingtionship betw

Between Prof

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Govandin et researchers apply chain. plier selectists, increasin

mproving comcustomer's d

5). Supplier e of multi-cricluding qua

ch as total evel of the curelated issueected? 2- Hod be purchast's statement making are c

plier selectific literaturethe emerge

ore propounain in the bDickson (19

d prioritize c. The ob

hat were ofte

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dustrial Enginee

9). Srivastaas follow

es in suppduct designing, productiroduct to tgement aftits shelf-life

most importaa big picture formance, aTherefore, tenvironmentycles of theenvironmentGreen supp

tor of suppenvironment

duct designiny, productiofer, delivery nsumption, itnt of reuse f

y consumptiormance of tn supply chaaterials supplt, distributioou can refer

al. 2015) about suppli

ion leads ng productivimpetition in tdemands fast

selection aiteria decisioantitative acost, deliveustomer whies: 1- Whi

ow much/maned? Accordi(1993), the

called suppli

ion issue we as a researence of linending concepbusiness spa966) conductcriteria used btained resuen used in t

n Devel

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ava ws: ply ng, on the fter e”. ant of nd the tal eir tal

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ier

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ery ich ich ny ng

ese ier

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ion Research, Se

valuation byriteria such alidity, facilrice. Most omain have ssue as a mularious quanthat the neces

making criterriteria’s natnalytic hierauggested woefficients on pairwise een applied barbarsoglu e

2. GGreen supplyncouraging nvironmentalreen supplie

which is conecision mak013). Many valuating indamiliar with pplied AHP ystem. Sark

method of tomponents: planning), lifnvironmentalhain, and ceuch as ISO

worked on Diewpoints ofompanies ba

ANP (analyticimensions strupply chain roposed newazardous sureen purchaecording, capazardous sububstances, lnvironmentalpplied qualinvironmentalompetencies igh-tech indrey system ustainability ummarized eontrol, poll

hod for order

eptember 2016, V

y the firms aas quality, dlities, manufof the studconsidered

lti-criteria isstitative and sity of usingria is discoture of suparchy processwhich has f criteria ancomparison

by many reseet al. 1997.

Green Supply chain ma

suppliers l performaner for suppnsidered as king for puresearchers hdicators of environmentto design a

kis (1998) the environmplanning for fe cycle anl quality manrtificate rela

O 14000. HDelphi methf environmenased on AHc network prrategic decismanagemen

w criteria for ubstances m

asing, green pability of bstances, maegal-complial managemeity, technolol managemefor green s

dustry. Bai aand rough s

into supenvironmentlution prev

allocation to

Vol. 27, No. 3

and the mosdelivery timfacturing cadies conduct

the suppliesue and havequalitative

g multi-criterovered. Duepplier selecs (AHP) tec

determined suppliers s. This tecearchers up t

lier Selectioanagement

to imprnce and proly chain man importanrchase (Kanhave done stgreen suppltal criteria. Na green sup

categorizedment into the environm

nalysis, comnagement, g

ated to the eandfield et od in orderntal experts

HP. Sarkis (rocess) to desion framewont. Hsu and

supplier selmanagement

materials cgreen design

anagement oance compeent system. ogy, polluti

ent, green prupplier selec

and Sarkis (set method tpplier seletal criteria avention, env

suppliers in …

st important me, producer apacity, and ted in this er selection e focused on

criteria, so ria decision-e to multi-ction issue, chnique was ed weight score based hnique has to now, like

on focuses on

rove their oviding this management, nt factor in nnan et al. tudies about liers to get Noci (1997) pplier rating d business five major ment (green mprehensive reen supply

environment al. (2002)

r to collect in different

(2003) used evelop a six ork in green

Hu (2009) lection with

including coding and n, a list of f hazardous

etency, and Lee (2009) on control,

roducts, and ction in the (2010) used to integrate

ection and as pollution vironmental

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DDeveloping a m

managemenpollution proposed evaluate esupplier sematerials, environmenenvironmenmanagemendeveloped for green pobjectives, green scoreof renewalchain manaevaluation Govindan criteria appsupplier anconsumablecompatibilienvironmenenvironmendeveloped considers developmebelieved thselection isorganizatiosustainabilicomplexitywell to imsupply chavariable. customers compatible(Gandhi etliterature, focus on t2015 and ignored sothe supplierIn the passome procNow, duapproach, imaterials, dformation circulation and environchain incluproductionservices, Importancemanagemenhazardous

method for or

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nt system, rproduction. a fuzzy m

environmentaelection whic

environmenntal costntal mannt process. two multi-obpartner selece.g., cost, t

e evaluation.l products, gagement, pocriteria of enet al. (2013)

proach for mnd considere resource ity with ntal manntal criteria.

an optimthe supp

nt, and ihat decisions difficult in

on. Becausity issue in

y in decision mprove the ain. Also, sus

In the dedo not wa

e products t al. 2016). there is a wthe green sKannan et cial dimensir selection.

st, the life ccesses from ue to envit includes pdesign, prodof a closfor reducin

nmental harmudes processe, logistics m

and recye and advantant do not and poisono

rder allocatio

al Journal of Ind

resource conAwasthi e

multi-criteria al performanch applied a

ntal effects, ts, green

nagement Yeh and C

bjective genection which time, produc They offere

green design,llution treatmnvironmenta) proposed aeasuring sus

ring pollutioand availa

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n-making forn the supplyse the inn the chain

making, it stotal perfor

stainability ceveloping cant to pay

with the According twide range upplier seleal. 2015).

ion in decis

cycle of prodesign to

vironmental processes of duction, recysed ring frng resourcemful effects.es of raw mamanagement

ycle (Strivages of green

limit the ous substance

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dustrial Enginee

nsumption, aet a1. (201

approach nce for greavailable cle

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ct quality, aed green ima, green suppment cost, a

al performanca fuzzy multainability of

on productioable resourcnment, a

system Sarkis (201

model whiion, suppliability. Thr the suppliy chain of tntegration

causes moshould be dormance of tcriteria may countries, tmore for t

environmeto the relevaof work wi

ection (AkmAknan (201ion-making

oduct includconsumptiomanageme

preparing raycle, reuse arom materiae consumpti. Green suppaterials supplt, distributiovasta, 2007n supply cha

decrease e consumpti

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r decrease oreen supply or all parts oan spread omains. Copproach andhain manageollows:

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At first, AHPupplier selecechnique is

materials. Arogramming ach raw megarding de

According to few papers

dar1, Z. Hass

eptember 2016, V

of harmful pchain mana

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of supply impact of

ility in the shis article, angreen supplimework of thP is used forction criteria

used to rAfter, a

(MOLP) momaterial to temand and the relevant

s which hav

sanzadeh2, A.

Vol. 27, No. 3

pollutants. Pragement can ization and tngible and should acclity with gruse of ten

ability

mpetitive advh rules

putation

ated green

ble raw mat

ful raw ma

patible crit

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a. Then, fuzzrank suppliemulti-objectodel, order athe supplier

resource literature, th

ve been dev

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rinciples of be utilized

their effects intangible

cept green reen supply

reasons as

vantage

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terials with

aterials for

teria with

esign with

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nd reducing

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pproach 2012), there ews about

nt years, but show the

exibility or rategies for n (Torabi et approach is

on. Figure 1 method. weights of

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allocation of rs is done constraints.

here are just veloped and

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2222

222 M. M

have mixeeconomic resource a

3-1. AnalyMulti-criterevaluate dicriteria whimportant athat all the from themMCDM tecevaluate qsimultaneodecision teby Tomas Dweiri etforecastingsupply chafrom multiin many inof the strongenerate subjective applicable terms of vcomparisontwo hierarcThe main delivery, literature rebased on tof AHP in 1-making comparisoncompatibilifamous medetails, refdomain. 3-2. FuzzyIn the reinformationof the optioin the evreflecting u

Creating hierarchy

for supplier selection problem

M. Paydar1, Z.

Internationa

ed some mesupplier sellocation me

ytic Hierarria decisionifferent optioich do not haadvantage ovcriteria shou

. An importachniques is qualitative usly. One

echniques is Al-Saati (

t al. (2016g model for pain. This moi-criteria dec

ndustries andngest feature

numerical knowledgein evaluati

various facton matrix. Thchies (main

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hierarchy; n; 3- calculaity. This meethods of defer to the re

y Set Theoreal world, n involves evons. Thereforvaluation ounreliability

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weights busing AH

method

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al Journal of Ind

ethods amonlection criteethods for m

rchy Procesn-making teons with regave the samever the tradituld turn intoant advantagthat they caand qualitof the m

AHP that w1980) for t

6) proposedproduction podel is basedcision makind easy life apes of the AH

priority . This meing supplierors based onhe problem i

criteria ande price, qu

ere identifiee criteria havopinions. Im

aking include2- doin

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ng green aeria regardimulti-objecti

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model for supmbiguous inhe weight onding diffapacities. Ontegration objective lincertainty illocation. Crprocess to h

ompany’s crf each projeo find a monsidered aOPSIS for ompany. Usil. (2009) pron the samroblem. Theelection critormulated a nteger numbrder allocatiobout fuzzy roblem, refMoghaddam 011, Ozkok nd Guneri 20

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nd understanset theory wed to formulnd inexact teria in themar et al. (20

method to tion problemejected cost,nd constraintlity, value ofation to the

mid et al. (2pplier select

nput parametof quantitatiferent sourOzgen et of fuzzy seinear progn supplier

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onsiderincapacity, emand, d quality onstraint

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Vol. 27, No. 3

em in gree

nding of decwas developelate some proinformation

e real-world006) used an solve a mul

m by minim, delivery dt, sellers capf items purc

e individual 2006) utilizetion problemters in determive and quarces and al. (2008)

et theory gramming

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in suppliee followinor 2014, A, 2011; Wu 2

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DDeveloping a m

3-3. TheRanking STOPSIS issolving MCHwang andescribed ta simple procedure, rationale ounlimited performancbetween opcomparisonare avoided2007; Govmethod finat the samethe ideal closest to obtained. follows (H2006): Step 1: Th

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method for or

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nds the distae time by defsolution. Fithe PIS anSteps of T

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he normaliz

e obtained as

nm

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n

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TOPSIS M

he classicalem, originally981). Shih in more detaion processnd logic repoice. This scriteria an

is an expl set. Furthermby methods l. 2007; Wanal. 2013). nce betweenfining relativinally, the

nd farthest tTOPSIS solYoon, 1981

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dustrial Enginee

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Raw materialsuppliers arameters: rs: Price of puhe sth suppliers: Cost of oth supplier : Cost of trans: Distance frr: Cost of hol

dar1, Z. Hass

eptember 2016, V

positive ideal

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are minimizamount of pd minimizingrovided. Theto formulate s r

s

urchasing theer rdering the r

nsporting therom the sth slding the rth

sanzadeh2, A.

Vol. 27, No. 3

l solution (P

IS, A ) are

ach alternativ

m,...,,21

m,...,,21

coefficient

alternativese descendingficients CCi.

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model is pruppliers. Thdes a set ofed simultanethe best soluWang and Y

(2007) devm as a muln which ther

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suppliers, dource constrzing the

purchase fromg required ra following nthis model:

r=1,2,3,….,R= 1,2,3, ……

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PIS, *A ) and

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M. Paydar1, Z.

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weight of thupply verage defech supplier

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ontrols the mo provide an11) states tharom a suppliecceptable. (T

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Researchers aresence of mf decisions 998). The ormulated byool for solvinroblems, acolutions. Theuxiliary variaot as ‘decisiormulate the istance betwhe realized sre excited, hown by nechievement eviation ( donstraints: onstraints. Sollowing th

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maximum cany type of raat the order qer cannot beThe order qm the sth sumum capacital). Constrainion variables

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Vol. 27, No. 3

apacity of eaaw material.

quantity of rae less than thquantity of tupplier shouty of the sthnts (12) ands.

ming for

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DDeveloping a m

and iW a

respectively

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DDeveloping a m

[1] Abdointegrselectwith (2015

[2] Akma

includprogramethoEngin

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[4] Amid

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[5] Awas

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[7] Barba

applicproceprobleManapp. 14

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approselectIntern

method for or

Internationa

Refellahi, M., Arated approation: Lean o

Application5), pp. 679-6

an, G., Ede green ams via fuzods. Comneering, Vol

d, A., Ghodfuzzy mult

upplier selenational Joomics, Vol.

d, A., Ghodweighted m-objective y chain. I

uction Econ39–145.

sthi, A., Chauzzy multi ating enviruppliers. Inuction Econ70-378.

C., Sarkis,inability into

system odologies. Iuction Econp. 252-264.

arsoglu, Gcation of ss to them. Produ

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hen, C. Lioach for sution for supnational Jo

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zzy c-meansmputers &

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dsypour, S. ti objective ction in a sournal of . 104, (200

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nomics, Vol.

auhan, S.S.,criteria a

ronmental nternational

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he supplieuction andurnal, Vol.

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dustrial Enginee

Razmi, J., Aplier portfolxpert System42, No. (1

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s and VIKO& Industri

), pp. 69-82

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H., O’Brieodel for fuzzelection in al Journal . 131, (2011

, Goyal, S.Kapproach f

performanl Journal . 126, (2010

). Integratinselection wirough s

al Journal ol. 124, N

e, T., Atic hierarcher selectiod Invento 38, (1997

ang, A fuzzaluation anmanagemen

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to ent OR ial 2.

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9] Crispim,selectioncriteria InternatiResearch4812.

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